Rand Formula Required by Charter!

The Alberta Labour Relations Board issued an interesting Charter decision recently, ruling that the absence of the Rand Formula from the Alberta labour relations code was a violation of freedom of association in Section 2(d). It involves Old Dutch Foods and the UFCW. Here is the decision. The Board gave the government 1 year to introduce some form of Rand Formula. Of course, a review of the decision may be well underway by then.
The Rand Formula describes a statutory provision introduced decades ago in most provinces that provides that, where a union so requests, the collective agreement must include a clause requiring the employer to deduct union dues from all employees in a bargaining unit (employees covered by a collective agreement) and remit the money to the union. In Ontario, it appears in Section 47. It was the solution proposed by Justice Ivan Rand to end a bitter strike at Ford in Windsor back in the 1940s.
Alberta, and some of the maritime provinces (N.B., N.S., and PEI), have not included a mandatory union dues provision like the other provinces. The Alberta Board decision notes that the Rand Fomula was part of a package of reforms that comprise the core of our labour law model in Canada, which includes majority representation (unions are elected by a majority of employees), exclusive representation (once the union is seletected, it becomes the representative of all employees in the bargaining unit), and a duty of fair representation (the union has a legal obligation to represent all bargaining unit employees, even those who are not union members–i.e. haven’t signed a union card). The justification for a Rand Fomula is that all employees benefit from the union’s services, and the union is legally mandated to represent all employees, and therefore it is only fair that all employees should have to contribute their share to the costs of the union performing these services. Plus, a Rand Formula puts an end to strikes for union security, a common event in Canada labour history.
Alberta’s government felt fine about imposing the duty to represent all workers on unions, but not the reciprical duty on employees to pay their share of the costs of that representation. In my opinion, the obvious reason is that the Alberta government does not actually want to empower unions by securing them a stable source of financing. However, the government explains its position as protecting the free ‘choice’ of workers (to free ride on the services paid by others, I presume). Interestingly, the government did not argue that the violation of Section 2(d) was justified under Section 1.
The Labour Board ruled that not including a provision that requires all bargaining unit employees to pay union dues is unconstitutional because it substantially impedes the ability of workers to join together and engage in meaningful collective bargaining.

In the case before us, as already mentioned, we accept the Union’s claim that the Code is underinclusive because it fails to provide adequate statutory protection to enable it and its members to engage in meaningful collective bargaining, the effect of which is to substantially interfere with the fundamental freedom of association.

I consider a similar argument in my new paper (coming out in the next volume of the Canadian Labour & Employment Law Journal) about whether Section 2(d) now requires governments to legislate union access to workplaces for the purposes of union organizing. My point was that ILO Convention 87 requires this, and the Supreme Court ruled in Health Services that Section 2(d) of the Charter must provide at least as much protection as Convention 87. However, I conclude ultimately that union access would not be required by Section 2(d) because unions would be unable to show that not having access ‘substantially interferes’ with collective bargaining or the right to organize.
In the Alberta case, the Board relied on the lower union density in non Rand formula provinces, and the fact the UFCW has been unable to bargain a mandatory dues check-off in its long time relationship with Old Dutch, to justify its conclusion that the absence of a Rand Formula provision ‘substantially interferes’ with the exercise of Section 2(d) rights.
And so, the ongoing modernization of Section 2(d) continues …

Professor Doorey is an Associate Professor of Work Law and Industrial Relations at York University. He is the Director of the School of HRM at York and Director of Osgoode Hall Law School’s executive LLM Program in Labour and Employment Law and on the Advisory Board of the Osgoode Certificate program in Labour Law. He is a Senior Research Associate at Harvard Law School’s Labor and Worklife Program and a member of the International Advisory Committee on Harvard University’s Clean Slate Project, which is re-imaging labor law for the 21st century

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